I am pleased to announce the appointment of
Dennis Hordyk as the new Assistant Vice Chancellor
for Financial Services, replacing Brad Wells,
effective September 24, 2001. Dennis comes to us
from the State of California Department of Finance
where he is the Assistant Director. He has been
with the Department of Finance for thirty years.
Not only does Dennis have experience managing a
very large financial services operation, there are
over 370 employees in his department, he also has a
lot of very valuable Sacramento contacts and
background. In addition, with his experience in
dept financing, Dennis should prove very helpful in
developing strategies for the CSU's many upcoming
capital development projects. Please join me in
welcoming Dennis to the Chancellor's Office when he
arrives this fall.

CAPITOL
UPDATE

State
Budget: The first budget impasse of the Davis
era showed signs of nearing an end this week when
the State Assembly approved the budget bill on
Monday, July 16. The vote to approve the bill was
54-26, with four Republicans (Mike Briggs-Fresno,
Richard Dickerson-Redding, Anthony Pescetti-Rancho
Cordova, and David Kelley-Idyllwild) joining their
Democratic colleagues in support. The budget now
advances to the State Senate, where a vote is
expected later in the week. Approval in the Senate
is not a foregone conclusion, as the Senate
Republican Caucus appears to be steadfast in their
position that the budget raises taxes to expand the
size of government.

Summer Recess:
If the budget is approved by Friday, the
Legislature will begin their Summer Recess,
returning on August 20 to complete the final four
weeks of this year's session (which ends on
September 14). During those final weeks, the focus
will primarily be on fiscal committees and floor
sessions, which typically last well into the night
during the final days before Interim Recess begins.
It is also expected that negotiations on an
education bond will occupy much of the
Legislature's time.

Edison
"Bailout": The other roadblock to a timely
Summer Recess is reaching agreement on a plan to
keep Southern California Edison from declaring
bankruptcy. Governor Davis has threatened to call a
special session during the traditional break if the
Legislature does not approve the plan he introduced
more than three months ago, but there is little
consensus among members of the Legislature about
how to proceed. Under a plan introduced by Assembly
Speaker Bob Hertzberg, the state would pay $2.4
billion for the transmission lines owned by Edison,
and the utility would pay off its remaining debt by
issuing bonds. A bill introduced by Assembly Member
Rod Wright would allow Edison to issue bonds to
cover all of its debt (coupled with a rate increase
until the debt is paid), and a third alternative
introduced by Senator Byron Sher would give the
state a five-year option to buy the transmission
lines and have the state cover only $2.5 billion of
the utility's debt. Debate on all three bills, as
well as the governor's plan, will continue
throughout the days prior to the scheduled
recess.

Trustees'
Legislative Program: The Trustees' Legislative
Program continues to advance through the
legislative process, with some bills nearing the
governor's desk. The status of each bill is shown
below:

Assembly
Bill 1689 (Assembly Jobs Committee), which
would permanently provide CSU the authority to pay
its vendors directly, is pending consideration on
the Senate Floor, where it is on the consent
calendar. After approval by the Senate, the bill
will advance to Governor Gray Davis for his
consideration.

Assembly
Bill 1719 (Assembly Higher Education Committee),
the CSU's omnibus bill for 2001, was approved
this week by the Senate Appropriations Committee
and will next be heard on the Senate Floor. Because
it was amended in the second house, it must return
to the Assembly for concurrence in amendments. The
bill clarifies CSU's procurement authority,
conforms the minor capital outlay threshold for CSU
projects to that which currently exists for other
state projects, and was recently amended to include
a provision that clarifies the use of the CSU name
by non-state entities.

Senate
Bill 277 (Chesbro), which would make CSU
employees eligible for the Rural Health Care Equity
Fund, is on the suspense file in the Assembly
Appropriations Committee. All bills with a state
fiscal impact in excess of $150,000 are placed on
suspense, and we expect the committee to take
action on such bills in late August.

Senate Bill 323
(O'Connell) and Senate Bill 593 (Alarcon),
which would authorize property exchanges at the
Channel Islands and Northridge campuses,
respectively, were unanimously approved by the
Assembly Higher Education Committee on July 3 and
will be heard next in the Assembly Appropriations
Committee. If the Legislature begins its Summer
Recess on schedule, those hearings will occur in
late August.

Senate Bill 713
(Alpert), which will be amended to authorize
the CSU to offer the Doctoral Degree in Education,
will be heard in the Senate Education Committee in
January. In the meantime, the CSU has gained
significant legislative support for this effort,
with more than 35 members agreeing to co-author the
bill.

On July 11, a new bill was added to the
Legislative Program when Assembly Bill 895
(Wiggins) was amended to implement a provision in
the CSU's collective bargaining agreement with the
Statewide University Police Association that
provides for a 3% at 50 retirement benefit. This
bill was unanimously approved by the Assembly
Public Employees, Retirement, and Social Security
Committee on July 18.

NEWS
FROM THE DEPARTMENTS

BUDGET
OFFICE,John Richards, Director

2001/02
State Budget UpdateThe CSU's budget has undergone several
changes as it has progressed from the Governor's
January budget proposal, through Senate &
Assembly subcommittee hearings, the May Revision
and Conference Committee action. The state's
economic and energy situation has placed the budget
in the public spotlight and has required changes,
both positive and negative, in CSU budget support.
As of this writing, the state budget (SB 75, Peace)
has been adopted by the legislative Conference
Committee, has been approved by the assembly and
is now awaiting the required 2/3 votes by the
Senate for approval before being presented to the
Governor for signature.

The Governor's May Revision resulted in a
reduction of $70 million in CSU General Fund
partnership funding. This action required a number
of adjustments in the CSU expenditure pan for
2001/02, notably a $41 million reduction in CSU
funding for employee compensation increases
(reducing the total pool available for collective
bargaining from 4% to 2%). The May Revision also
increased funding above the partnership agreement
by a net total of $12 million, which primarily
reflects the elimination of $20 million in one-time
funds originally provided for instructional
equipment and the provision of $34.1 million in
one-time and permanent funds for increased CSU
natural gas costs. The legislative Conference
Committee restored $5 million in partnership
funding for CSU workforce preparation and economic
development academic programs and $250,000 in
funding above the partnership agreement for CSU
biotechnology applied research. Overall, the
budget, as adopted by the Conference Committee and
the Assembly, reflects a gross funding increase
(including projected enrollment growth revenue) of
$238.8 million.

2001/02
Campus Final Budget Submission InstructionsWithin two weeks of state budget enactment,
the CSU System Budget Office will provide the
campus Chief Financial Officers with an expenditure
plan via a Budget Office memorandum for 2001/02
Final Budget allocations. This memorandum will
provide campuses with detailed information
regarding how the CSU budget is allocated to
campuses. Campus budget officers will be notified
when the Final Budget Allocation Memorandum is
available on the CSU Budget Office web page. Also,
2001/02 campus Final Budget submission instructions
will be available soon on the CSU Budget Office web
page.

As in previous years, campuses will receive, via
FTP server, three amounts for campus disbursement:
(1) the change in State University Grants (SUG);
(2) remaining net General Fund Expenditure
Adjustment; and (3) the State University Fee
Revenue Increase. There are no increases in
Education Opportunity Program Grants in 2001/02.
Other than SUG and EOP, campuses maintain
flexibility on the minimal level of General Fund
program budgets for expenditure.

Campus Budget Officers will be requested to
return their individual revised 2001/02 budgets to
the system Budget Office on or about August 15.
This timeframe may be adjusted if the state budget
is not implemented by mid-July; however, adherence
to the August 15 timeframe will be requested to the
extent possible.

The Financial Advisory Committee adopted new
validation criteria for campus FIRMS submissions
last January. Budget Officers will be notified of
these changes in the 2001/02 final budget
instructions. Also, as a reminder, campus 2001/02
final budget submissions should reflect retirement
rates for the most recent past year. Adjustments to
campus retirement budgets 2001/02 PERS employer
retirement rates will be made at the system level
and after the CSU is notified by the Department of
Finance to make retirement adjustments (around
mid-fiscal year). Historically, the CSU has been
fully funded by the state for increases in employer
retirement rates.

CSU
Student Fee Policy - Annual Fee ReportThe CSU Student Fee Policy, Executive Order
740, requires that each campus report to the
chancellor for the most recently completed fiscal
year a complete inventory of all fees charged to
students and the total revenue collected for each
fee.

This year, the CSU System Budget Office is
taking steps to change the process of campus fee
data transmittals, whereby campuses will directly
input 2000/01 fee levels and revenue and 2001/02
fee levels into a systemwide fee database via a web
browser using a pc. This will provide specified
campus users with the capability to view fee levels
at all campuses. It also eliminates the step of
data entry into an Excel spreadsheet, which would
then be downloaded to the systemwide fee database.

In preparation, campus Budget Officers will be
given instructions and web browser requirements.

A summary of the 2001/02 fee report will be
presented at the November Board of Trustees meeting
to allow the board to review the level and range of
fees charged to students.

Instructional Equipment ReportsThe annual call letter for Instructional
Equipment Reports will be sent out to all campuses
in the latter part of July, and will also be posted
on the Budget Office web page. For more
information or details regarding this upcoming
request, please contact Sharon Okashima at (562)
951-4562 or by email sokashima@calstate.edu

Campus Reported Fee WaiversBudget Officers are reminded that the
report of fee waivers campuses provided for the
2000/01 fiscal year is recorded in campus ERSS
enrollment reports. Budget Officers are advised to
review this data to ensure the information is
accurately recorded. The Budget Office will use the
ERSS data to develop campus revenue estimates and
in the campus allocation process for the 2002/03
fiscal year.

Housing
Assistance Needs AssessmentA housing needs assessment study is being
performed by Bay Area Economics (BAE) to quantify
the extent to which the availability and cost of
housing are obstacles to recruiting and retaining
faculty and critical staff. The on-campus portion
of the study has been completed. Interviews of
campus representatives who have been involved in
both successful and unsuccessful recruitment
activities, and focus groups with recently hired
faculty and staff (or comparable activities) have
been completed at the twelve participating
campuses. BAE is currently performing a housing
market gap assessment and conducting telephone
interviews with candidates who declined offers of
employment with the CSU. Campus systemwide reports
will be completed in August

Quality Improvement (QI)
ProgramsThe 4th Annual Quality Improvement
Symposium and Expo will take place on Friday,
November 2, 2001 at the Los Angeles Airport
Marriott. Mark Graham Brown, management consultant
and author of Keeping Score will give the keynote
address. Lunch will include the awards
presentation spotlighting those individuals who
have shown outstanding dedication to the quality
initiative in the system and at their campuses as
well as the presentation of the Mighty QIC (Quality
Improvement Champion) awards. This year's expo
promises many more exhibits highlighting campus
quality improvement efforts. The afternoon will
conclude with breakout sessions that will present
campus activities in Balanced Scorecard, Baldrige,
and the new PBViews performance management
software. A welcome reception will be held on
Thursday evening. More information on the 4th
Annual Quality Improvement and Expo and a full
agenda is available at: www.calstate.edu/qi.

For more information on Quality Improvement
Programs, contact John Sanders at 562-951-4556.
Information is also available at www.calstate.edu/qi.

ARCHITECTURE AND ENGINEERINGCPDC is pleased to have added Mr. Satinder
(Steve) Gulati to its staff. As a California
licensed mechanical engineer, Steve adds some
critical expertise to the design and construction
consulting services we can offer to campuses. Mr.
Gulati has over 30 years of mechanical design
experience that included being a HVAC equipment
manufacturer, design-build contractor, owner's
representative and a consulting engineer.

As we continue to build more complex buildings
with even more demanding mechanical systems, we
have learned just how difficult it is to meet the
performance requirements expected of these
facilities. It is essential to provide the AE
firms with all relevant design criteria, and then
carefully monitor the design and construction's
compliance with the design criteria.
Unfortunately, the complexity of these systems can
preclude an informed review even by experienced
project managers. That is why we are so pleased to
have an experienced mechanical engineer on staff to
perform that due diligence on CSU projects.

To receive the maximum value from both our
staff, and your building, we encourage the campuses
to involve Mr. Gulati in a peer review of the
projects' mechanical systems beginning no later
than the schematic design phases of a project. We
are also looking forward to making use of Mr.
Gulati's expertise in working with campus staff to
develop appropriate standards for building systems
on new CSU projects.

Robert C. Schulz, AIA, Chief, Architecture
and Engineering

CONSTRUCTION
MANAGEMENT

SUAM, Section
XII-Construction Management for Public Works
Contracts

The following four sections were added/amended:

Section
9700.04, Build and Inspect Per Code, addresses
the role of the Deputy Building Official on campus,
and includes Section 9700.04.01, which further
describes construction phase code requirements of
the Deputy Building Official (written code
validations, inspections, and certificates of
occupancy).

Section
9701, Categories of Public Works Projects, has
been modified to requirements of public works
contracts that apply to all of the contracting
vehicles listed therein.

Section
9785.01, Credentials for Inspector of Record,
has been revised to include more specific
credentials for the Inspector of Record (including
a reference to Sample Responsibilities and
Requirements of the Campus Inspector During
Construction Phase (for Minor and Special Repair
Work) which can be found in Appendix D).

Section
9785.02, Project Manager/Inspector Cost
Guidelines, now provides a range in multiplier
rates that can be used when negotiating agreements
for inspection services.

Section 9824,
Certified Payroll, has been modified to require
collection of the first week of payroll records
from the general contractor and from each
subcontractor of any tier on each project. For
minor and special repair projects under $20,000,
collection of certified payrolls is optional.

It is intended that these changes and updates to
SUAM serve to strengthen management practices for
all public works type projects whether major, minor
or special repair. Staff may download a copy of
the newly updated SUAM, Section XII, and the new
form, Sample Responsibilities and Requirements of
the Campus Inspector During Construction Phase (for
Minor and Special Repair Work), in Appendix D from
the CPDC web site: www.calstate.edu/CPDC,
under "Executive."

Supplementary
General Conditions Supplementary General Conditions for
Telecommunications Infrastructure Upgrade projects
were created and distributed to the Phase I
campuses. These Supplementary General Conditions
modify the Contract General Conditions for Major
Capital Outlay Projects, January 2001 edition, and
were created to accomplish the following
issues:

1)

Telecommunications Subcontractor is
defined as a subcontractor who has
technically pre-qualified with the
Trustees to bid on the Telecommunications
Infrastructure Upgrade projects. These
subcontractors will have a C-7 or C-10
license and will perform the low voltage,
telecommunications cabling work on these
projects.

2)

General Contractors are required to
technically pre-qualify with the Trustees
prior to receiving a bid package.

3)

General Contractors are required to
list only those subcontractors who have
technically pre-qualified with the
Trustees to perform C-7/C-10, low voltage,
telecommunications cabling work.

4)

General Contractors shall not
substitute a listed telecommunications
subcontractor with another subcontractor
unless the replacement subcontractor is a
pre-qualified Telecommunications
Subcontractor with the Trustees, and all
the requirements of Public Contract Code
Section 4100 have been satisfied.

Please contact Barbara Nicholson at 562-951-4117
for a copy of these Supplementary General
Conditions.

Pre-qualificationCPDC implemented the new pre-qualification
standards on April 1, 2001. We hired a new
Pre-qualification Coordinator, Ms. Heather Bare, to
assist in the process. To date, it is proceeding
well, and contractors are learning that it takes a
little more work to pre-qualify with the Trustees.
Some of the new standards include CPDC's collection
of safety records and obtaining reference checks on
three projects selected randomly.

A review of the process will take place in July,
and then any additional refinements will be made to
the pre-qualification forms. Look for revised
forms on the CPDC web site.

James R. Corsar, Chief of Construction
Management

FACILITIES
PLANNING

2003/04
Major Capital Outlay Program and Five-Year Capital
Improvement Program The 2003/04 state
program is proposed to be funded from a new general
obligation bond anticipated for a March 2002 ballot
initiative. A number of legislative proposals have
been introduced in support of a bond measure for
higher education, including proposals for joint
K-12 and higher education bond funding.

We are supporting proposals in hopes of a
four-year bond that will provide $4 billion for
higher education. This could equate to a range of
$250M to $325M per year for the California State
University capital program funding.

The 2003/04 program will be the second year of a
new state-funded capital process, under Assembly
Bill 1473 signed by the Governor on October 5,
1999, the California Infrastructure Planning Act
(Government Code, Title 2, Section 13100). The
Infrastructure Planning Act requires that the state
shall establish and annually update a systemwide
five-year plan for funding infrastructure. The
plan is intended to complement the existing state
budget process for appropriating funds.

Schedule
of Submissions and Calendar of Capital Outlay
Process

July 10-11, 2001

Board of Trustees approves the
Categories and Criteria.

August 10, 2001

Campuses submit Draft Capital Outlay
Budget Change Proposals.

October 19, 2001

Campuses submit Final Capital Outlay
Budget Change Proposals.

January 2002

Executive Council and Board of Trustees
review the 2003/04 Capital Outlay Program.

Capital
Project DatabaseThe Capital Planning, Design and
Construction (CPDC) department is required to
provide milestone, financial, and evaluative
information regarding the capital outlay projects
to meet different objectives and separate
audiences. For many years, data has been collected
and disseminated independently to meet these
reporting requirements, resulting in duplicate
efforts and conflicting information. In response,
CPDC initiated the creation of a database that
would store a suite of information for all capital
outlay projects, regardless of funding, from which
reports (as required and as needed) could be
generated.

The resulting Capital Project database is
Web-enabled and Oracle-based. It was created and
is maintained by the Business Management Services
(BMS) group of the Chancellor's Office. CPDC
continues to work with BMS to both modify and
improve the reporting capabilities, and to develop
required reports. To-date, CPDC has submitted
reports generated from the database to the
Department of Finance and the CSU Board of
Trustees. These reports vary in their set of
projects included, as well as the content.

Elvyra San Juan, Chief of Facilities
Planning

Plant,
Energy & UtilitiesAs a part of the California Energy
Commission's (CEC) program to ensure efficient use
of energy throughout the State of California, large
businesses and institutions have been requested to
provide a plan on how they are responding to energy
emergencies and, in general, to the current
California energy crisis. The plan titled, The
Peak Load Reduction Plan (PLRP), details efforts
made in the areas of conservation, curtailment, and
participation in state and utility company
sponsored load reduction programs.

A PLRP report has been generated for submission
to the California Energy Commission that describes
the individual plans for each California State
University Campus. The data for the reports was
assembled by campus Energy Managers/Facilities
personnel and contains the measures that campuses
have committed to as part of their overall energy
program. Participation in the ISO Demand Reduction
Program, the ISO Optional Binding Mandatory
Curtailment Program, the use of cogeneration and
emergency backup generators, as well as a
description of recent conservation projects, are
just a few areas described in the CSU's report on
the systemwide campus effort. For more information
on energy conservation programs and the CEC report,
contact Mark Gutheinz at 562-951-4122, or mgutheinz@calstate.edu.

CS&P has issued the following Bulletins in
the last quarter of FY2000/2001, a synopsis of the
notices follows. Further information on these and
other policy and contract notices maybe obtained
at: http://www.calstate.edu/csp/csu_bulletin.shtml

CSU's Policy Manual for Contracting &
Procurement has been revised in order to
incorporate requirements of SB 1049 which
include:

(1)

Increasing the upper limit of the
dollar threshold for the awarding of a
contract to a Certified Small Business
from $50k to $100k, and,

(2)

Increasing the threshold required
for formal solicitation of ITR goods
and services to $250k.

The increase to the bid threshold to $250,000
for Information Technology goods and services will
allow campuses procurement office to better respond
to the dynamic IT environment and better utilize
alternative procurement vehicles. Purchases of IT
goods and services under $250,000 may now be
through informal either written or verbal
quotes.

Bulletin
01-10 Software SalesCompucom has established a CSU custom website
which provides for maximum discount pricing to the
CSU of select software products. Orders may also be
placed for other software products not listed on
the web site on an as needed basis. The
manufacturers in the initial list are: Symantec,
Adobe, and Filemaker. More manufacturers will be
added as volume pricing contracts and relationships
are established by the CSU.

Bulletin
01-09 - Sun Academic InitiativeA systemwide Agreement with Sun Microsystems
has been executed which provides that Sun shall
make available certain courses, seminars and other
training opportunities on computer technologies,
products and services. Campuses may elect to
provide educational opportunities to students
through faculty-led courses in Sun Microsystems
technologies, such as: Java(TM) programming
language; Solaris(TM) operating environment, and,
the StarOffice(TM) suite of office productivity
products.

New
Systems Contract UnitI am pleased to announce a newly formed unit
within CS&P that will enhance services
associated with system wide master contracts,
volume pricing and discount agreements. Assistant
Director Tom Roberts will head the new System
Contract unit. Tom has worked in CS&P for
several years as the lead contract specialist for
leasing technology acquisitions. The System
contracts unit will include a dedicated contract
specialist assigned to the support of system wide
and multi campus software licensing agreements,
such as the Microsoft Select, and Oracle
contracts.

Pat Dayneko, Director

FINANCIAL
SYSTEMS, STANDARDS AND REPORTING

CSU
Investment Manager and Advisor

At the July 10-11th Board of Trustees meeting,
Metropolitan West Securities was approved as the
provider for CSU investment management and advisory
services. The contract will be for a three-year
period and will continue seamlessly the services
provided by MetWest for the past four years.

Richard Leffingwell, Senior director

Electronic
Interface with SCO

As noted in the July 2000 and March 2001 issues
of the Business & Finance News Letter, the
Chancellor's Office has participated in a joint
pilot project with the SCO to implement electronic
interfaces via FTP.

Due to the efforts of ten campuses that
volunteered to participate in this project with the
Chancellor's Office last year, the pilot was
successfully completed and as a result, it can now
be rolled out to all campuses.

The purpose of this connection is to accommodate
secure electronic data exchanges between CSU and
the State Controller's Office via File Transfer
Protocol (FTP). The objective is to eliminate data
exchanges via tape/cartridge or hard copy
documents.

Typical in-bound and out-bound exchanges would
include:

Agency Reconciliation File

Controller's Balances & Prior Year
Accruals

Paid Claims/CD102

Payment & Employment History

New Positive Pay Interface for Payroll
(PIP)

Working with State Controller's Office, the
Chancellor's Office has currently established the
connection for ten campuses. To establish the
campus interface, campuses need to fill out and
submit an Access Authorization form to the
Standards & Financial Reporting department to
request the new connection. To obtain a copy of the
form, please contact Jan Earl at jearl@calstate.edu.

The Financial Standards Advisory Committee
(FSAC) consisting of representatives from all
campuses has been conducting regular meetings to
review the status and progress of the GASB 34/35
implementation sub committees. The following is an
outline of the sub committees' progress in
addressing implementation issues:

Financial
Reporting: The Financial Reporting sub
committee has developed and adopted a common
reporting format that can be used as a CSU model
for the Statement of Revenues, Expenses, &
Changes in Net Assets, The Statement of Cash Flows,
and the Statement of Net Assets. A complete
reporting package has been prepared by three
campuses to convert and recast the previous GAAP
financial statements to the new reporting model. A
'Chart of Accounts' Mapping document is being
prepared to identify the necessary changes to the
chart of accounts. The complete reporting package
will be used as the basis for future GAAP
training.

Auxiliary
Organization Reporting: Responding to an
invitation sent to all campuses in May for
participation in FSAC Aux. Organization sub
committee, all campuses have submitted the names
for their official primary and alternate
representative(s) to the committee. A listserv has
been created to communicate issues related to GASB
34/35 implementation for Aux. Organizations.

Segment
Reporting: The Segment Reporting sub committee
is analyzing and documenting the process required
to generate the revenue bond financial statements
using data from the Chancellor's Office and the
campuses. The project team must document what
Chancellor's Office information will be allocated
to campuses for GAAP reporting purposes and draft
GAAP pass down entries. The team will identify all
required information the Chancellor's Office will
need from campuses to complete the revenue bond
financial statements.

Training: The GASB
34/35 implementation training is targeted for April
2002.

The GRIP Master Plan is available on the
Financial Systems, Standards & Reporting
department website at:http://www.calstate.edu/SFR/FSAC/GASB/GASBmain.shtml.

The IPEDS Finance Survey for the 1999/2000
fiscal year was prepared on behalf of all CSU
campuses and was submitted to NCES (National Center
for Education Statistics) in May. The report this
year included the auxiliary organizations at each
campus in an effort to reflect the scope of campus
operations more accurately and make the CSU
campuses more competitive and comparable with other
higher education institutions in the country.

Campuses can review their 1999/2000 IPEDS data
on the NCES website. For more information, contact
Sedong John at: sjohn@calstate.edu.

Financial Information
Record Management System (FIRMS) Update

In January, a memo to Chief Financial Officers
outlined the changes in FIRMS reporting
requirements that will become effective with the
last quarter submission of the 2000/2001 fiscal
year. These changes are applicable to all FIRMS
submissions, including accounting data for the
university and the auxiliary organizations and the
annual budget submissions.

For more information, please refer to Richard
West's January 10, 2001 memo and the accompanying
'Summary of Changes in FIRMS Reporting
Requirements' document that outlined the new
changes concerning the elimination of the temporary
help expenditure classification and the reporting
of revenues and expenditures. Please forward
questions to Sedong John at: sjohn@calstate.edu.

Laleh Graylee, Director

GOVERNMENTAL
AFFAIRS,

Karen Yelverton, Assistant Vice
Chancellor

Copies of CSU Legislative Reports and other
legislative information pertaining to the CSU are
available on the OGA website at: http://www.calstate.edu/ga

INFORMATION
TECHNOLOGY SERVICESDavid Ernst, Assistant Vice
Chancellor

ACADEMIC
TECHNOLOGY SERVICES

MERLOT Success
Continues23 systems of higher education partners are
MERLOT partners. At present MERLOT reaches 1,452
campuses, 361,700 faculty and 7.9Million students.
In the first quarter of 2001, there were over
250,000 hits per month to the website.

Though MERLOT was founded in the CSU, it's
success in attracting partners and its sustained
growth make it a viable candidate for a spin-off as
a 501C3 (non-profit organization). MERLOT has hired
an interim CEO and hopes to complete the
organizational change by July 1, 2002.

The first MERLOT International Conference will
be held August 12-15 at the University of South
Florida in Tampa.

PHAROS on-line for
Fall SemesterPharos version 1.0 will be on-line for the
start of the fall, 2001 semester. It includes a
common user interface with single search capability
for all 22 CSU library catalogs; the CSU Union
catalog; the UC library catalog; licensed databases
and selected websites. Version 2.0 of Pharos will
include broadcast searching capability and common
remote user authentication. Campuses may use this
version if they wish, but it will become the
supported version in Spring 2001. Pharos allows
resource sharing among the CSU campuses

COMMON MANAGEMENT SYSTEM
(CMS)

First Wave
Campuses Going Live on Finance and HRBy the end of this summer all 1st wave campuses
will be live on the baseline versions of the HR
and/or the Finance software. This is a huge
accomplishment. Congratulations to all who
participated in this effort.

Human Resources
Upgrade to 8.0The upgrade to version 8.0 of the PeopleSoft
Human Resource software was recently begun. This is
PeopleSoft's newest release and offers full
web-enabled functionality. Fit-gap sessions are
underway to identify changes between the current
baseline version 7.6 and the new 8.0 releases. The
upgrade will be implemented for the first CSU
campuses, the three SA pilot campuses, in February
2002 and will then be available for the 2nd wave
campuses and an upgrade path available for the 1st
wave campuses.

Student
Administration Pilot ProgressThe Student Administration (SA) pilot campus
implementations at Sonoma (plus CMA) and Fresno are
on schedule. Prototyping continues on the campuses,
initial data mapping and conversion has begun, and
the major software gaps have been identified as
compared to current systems.

Unisys
Data Center OperationalThe Unisys data center is operational at Salt
Lake City. Migration activities are underway to
move the 1st wave campus databases from WestEd to
the new data center. Several campuses are live with
their Purchasing functionality using the new Unisys
data center.

PeopleSoft
Annual ConferenceRegistration is now open for the annual
PeopleSoft conference to be held in Atlanta, GA
from August 26 - 29, 2001. Please see the
PeopleSoft web site for further information.

Build-Out
Program On ScheduleThe systemwide program of large-scale campus
telecommunications infrastructure upgrades being
promulgated as part of the Integrated Technology
Systems -- Telecommunications Infrastructure
Initiative (ITS-TII) is continuing on schedule:

The eight Phase 1 campuses have completed
construction documents for Stage 1 of their
projects.

Three (San Bernardino, Sonoma and Long
Beach) have already advertised for bids and all
eight should be under construction by early fall
of 2001.

The six Phase 2 campuses are finalizing
their Stage 1 bid packages. Bid advertisement
for these projects should follow shortly after
Phase 1 work begins.

The eight campuses constituting Phase 3 have
been proceeding with their Stage 1 preliminary
designs.

Stage 2 of the ITS-TII build-out program is
designed to complement Stage 1 by providing for the
completion of campus projects through financing
from the CSU's annual Support Budget. Stage 2 is
being centrally coordinated through the
Chancellor's Office and is progressing as
planned:

Subsequent to a lengthy RFP selection
process, a Master Agreement is nearing
completion with Pacific Bell as the systems
integrator of choice. To provide the required
equipment and services during the negotiation of
that Master Agreement, and to assure Stage
1/Stage 2 continuity, various interim agreements
have been established.

Cisco Systems has been selected by ITAC as
principal supplier of network electronics
system-wide, has already been working through
Pacific Bell to allow campuses to procure
equipment at deep discounts during the
negotiation period.

Technical advice during negotiations with
Pacific Bell has been provided from the CSU's
newly formed Network Technology Alliance (NTA),
composed of representative campus and
Chancellor's Office technology professionals.
NTA has proven invaluable in helping shape ITAC
recommendations regarding network development
system-wide, especially in the realm of
technical standards and operating standards and
practices.

Digital
California Project Network Deployment ContinuesUnder the auspices of Corporation for Education
Network Initiatives in California (CENIC) and with
funding from the University of California, the
Digital California Project (DCP) is intended to
extend advanced services networking capabilities to
each County Office of Education in the state.

The CSU has assumed a leadership role in the
design and deployment of the network in that 4CNet
was awarded the CENIC contract to architect the DCP
network. More recently, last month the first DCP
node became operational and is connected to the
statewide backbone through the Cal Poly San Luis
Obispo campus. Furthermore, 4CNet recently signed a
two-year contract with CENIC to provide
network-operating services to DCP.

The CSU
and Internet 2By virtue of 4CNet's participation nationally
through the University Corporation for Advanced
Internet Development (UCAID) and in California
through the Corporation for Education Network
Initiatives in California (CENIC), the CSU has
played a significant role in the development of the
next generation of high-speed, internetworking.
However, until recently, access to the Internet 2
Abilene network was restricted to individual
campuses that joined UCAID directly. This changed
in May when California became the first state to
join UCAID under the new Sponsored Educational
Group program. This means that all the educational
institutions in the state that connect to 4CNet -
the 23 CSU campuses and 127 California Community
College sites - and the DCP may now pass traffic
over Internet 2. While full benefits of Internet 2
membership are still reserved for individual member
institutions - CSU Hayward and the Office of the
Chancellor are the only two CSU members - access to
the Abilene network is a significant education and
research benefit to the entire system.

INTEGRATED
TECHNOLOGY SERVICES

Systemwide Electronic Information Resources
(SEIR) has arranged for an E-book pilot project
with vendors, netLibrary and ABC-CLIO. The project
provides CSU students and faculty with access to a
collection of 1625 full-text electronic books that
can be searched and read over the Internet.

Six librarians (from the Long Beach, Fullerton,
Fresno, San Francisco, Chico and Humboldt campuses)
comprise the pilot project assessment team.

The Business and Finance Newsletter is accessible from the Chancellor's Office
website http://www.calstate.edu/BF/.
Questions related to receiving the B&F newsletter or changes in e-mail addresses
should be directed to James Francel at (562) 951-4547 or jfrancel@calstate.edu.